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ACCOUNTS RECEIVABLE FINANCING IN CANADA
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Financing & Cash flow are the biggest issues facing business today.
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Factoring financing companies in Canada can help cure the ' inequality ' that Canadian business owners and financial managers face when arranging working capital and cash flow financing, specifically A/R Receivables finance. Let's dig in.
Is it possible that even Will Shakespeare weighed in our subject of accounts receivable factoring and factoring companies?! We went back and found some famous sayings he made, and it clearly seems to us that some of his most famous lines potentially referred to Canadian business financing and cash flow finance.
CONFIDENTIALITY IN BUSINESS FINANCING
‘MUM’S THE WORD ' (From Henry V1) = the reality is that thousands of business owners and financial managers don't really know enough about alternative financing solutions such as receivable finance. The truth? Simply that it is a strong alternative to traditional bank financing when your business can't access bank financing or enough of it. A huge part of the Canadian business sector now considers this cash flow financing via a factoring company method a quick and accessible popular choice.
THE CHALLENGE OF SMALL BUSINESSES TO ACHIEVE BANK FINANCING
'RANT' - (From Hamlet) it’s easy for many business people to 'rant' against the banks. Why is that when our banks have one of the strongest reputations in the world? Simply because many businesses either don't have the track record and financial strength mandated by the banks when borrowing for business credit. Banks in Canada are mandated by government and shareholder requirements to maintain a conservative lending policy.
WHAT ARE BANK QUALIFICATIONS FOR BUSINESS CREDIT
And while rapid growth from the entrepreneur is desired, even dreamed about, banks typical stance is to prefer slow and steady, keeping those ratios and covenants intact. Growth drives the need for continual working capital and cash flow as receivables constantly increase, along with inventories.
And if your firm doesn't have a pristine balance sheet, or has an operating loss, or perhaps the owners have some personal financial issues... well, the bottom line is that those become new issues to struggle with when attempting bank financing. Originating in the United States factoring is currently the most popular subset and solution in the asset-based lending /alternative finance landscape.
For small businesses in Canada, it can be a long time before clients pay the invoice for your products and services - these days 90 days is not unusual in certain industries!
WHO ARE THE ACCOUNTS RECEIVABLE FUNDERS IN CANADA - 7 PARK AVENUE FINANCIAL KEEPS IT ' CONFIDENTIAL'!
“KNOCK KNOCK - WHO'S THERE' (From Macbeth) - The who's there refers to the choices you have when seeking out a financing partner for A/R RECEIVABLES finance. That includes regional firms, small boutique financiers that specialize in specific business segments and industries, and Canadian and U.S. owned firms of all size. Our specific recommendation here is to learn about and access CONFIDENTIAL RECEIVABLE FINANCING, allowing the business to bill and collect their own receivables without intrusion.
Pricing depends on several issues around invoice amount, overall credit quality of your customer base, and the size of your facility. The advance rate on your receivables tends to be in the 90% range, which is a higher level of funding than traditional bank facilities - ie more borrowing power!
The industry prices according to a factoring fee, as opposed to an interest rate - at 7 Park Avenue Financial we spend a lot of time explaining that to new clients. Business can choose between non recourse factoring and traditional recourse factoring. Accounts receivables can also be insured against credit risk if the owner chooses.
CONCLUSION
Invoice factoring for working capital is a popular solution in SME Commercial finance in Canada. Receivables factoring via a trusted finance company partner delivers the funding you need to run your business on a day to day basis without short term business capital worries. If you want to maximize the availability of working capital from your asset base, seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your asset-based financing needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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